LIC shifts focus to IT firms and HDFC Bank, reduces stakes in other banks

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LIC shifts focus to IT firms and HDFC Bank, reduces stakes in other banks
Credit: © Reuters.

India's largest institutional investor, Life Insurance Corporation (LIC), has adjusted its portfolio, reflecting a shift towards information technology companies and select banks in Q3 2021. LIC increased stakes in IT firms such as Infosys (NS: INFY ) and Tata Consultancy Services (NS: TCS ), while decreasing its holdings in several banks including Canara Bank, IndusInd, Karnataka Bank, and ICICI Bank.

The insurance giant also ramped up its holdings in HDFC Bank, State Bank of India (SBI), and Axis Bank during this period. This move comes amidst expectations of a recovery in tech demand and a slowdown in bank credit growth.

In addition to the IT sector, LIC also made bullish calls on Tata Chemicals, Deepak Nitrite, SBI Cards, and L&T. The corporation offloaded stakes from 84 firms during this period, including Tata Motors (NYSE: TTM ) and Reliance Industries.

Analysts suggest that this shift is due to major threats to the current bull run such as bond yields and the impact of the war in Israel. They advise maintaining liquidity and investing in high-quality companies for a 12-18 month investment horizon.

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